Friday, May 23, 2008

Are the Best Universities in America?

By Jonathan Robe

Conventional wisdom holds that, when it comes to higher education, the US is the world leader by far. After all, don’t US universities attract a vast number of foreign students? According to the US Census Bureau, 565,000 foreign, nonimmigrant students were enrolled in US colleges in 2006.

The conventional wisdom is revealed in the rankings of world universities. Of all the countries with the top schools, the US heads the list. Take for example, the world rankings published by the Times Higher Education, available here. In these rankings, 13 of the top 20 universities in the world are located in the US. The methodology THE uses for their rankings has some validity, but it is still riddled with several flaws by focusing on inputs rather than outputs. For instance, THE includes “peer assessment” to rank the schools (it accounts for 40% of the total score). However, THE does attempt to track outputs somewhat by including an “employer review” variable in their rankings, a step in the right direction. As we argued in an article recently published in Forbes magazine, university rankings should be concerned with outputs, i.e., the value added to the students.

Figure 1 shows some of the top countries, based on the raw number of top universities. This figure clearly illustrates the case for the conventional wisdom. The US has almost double the number of top schools the UK has and over five times as many schools as all the other countries except Australia. One of the primary reasons for such high performance on the part of the US is that US universities are ranked very high by their peers compared to schools in other countries.

Figure 1

However, we get a quite different picture if we weight the number of top schools by national population. As Figure 2 shows, the US places much lower if we use this measure, lower than many European countries including every single Scandinavian nation. This contrasts sharply with the high level of investment in higher education in the US as we mentioned in a previous post. For instance, even though the US spends roughly 60% more on higher education as percentage of GDP than does Sweden, Sweden has over twice as many top universities per capita.

Figure 2

The obvious question is “Is higher education in the US really superior to education available in other countries?” Figure 2 suggests that the US higher education system is not using its resources as efficiently as other nations, particularly the UK, Canada, and Australia. Perhaps the conventional wisdom is wrong and the US is not the world leader in higher education. After all, in terms of growth in educational attainment, the US in recent years has substantially lagged behind most of the world. From 2000 to 2005, most European countries saw growth of over 10% in the number of adults who have achieved a college education, according to data published by the Organisation for Economic Co-Operation and Development. During this same period, the US saw merely a quarter of a percent growth. Basically, as spending on higher education in the US grew by 19 percent (as a percentage of GDP), college attainment remained essentially flat.

The US may spend more on higher education, but it appears that the return on that investment is not as high as the return other countries have on their investments. By the measure of top universities per capita, the US is by no means the world leader.

Jonathan Robe is a research associate of CCAP and an undergraduate engineering student at Ohio University.